The Investor

Published: Spring 2011

Paul Tierney ’64 owns a home on each coast, runs two successful investment groups, advises or sits on the board of several large institutions, and teaches classes at Columbia University’s business school. So, on this snowy Friday morning in New York, he’s keeping an eye on his watch ahead of a meeting with some very important people: his grandkids. Tierney is flying to San Francisco in the afternoon to join his wife, Susan, who flew out a day ahead of him, to babysit their three grandchildren for the weekend.

In an average week, Tierney says, he spends about half his time running his businesses, including Development Capital Partners, a fund he runs with his son and partner, Matthew, that invests in emerging markets, and Aperture Venture Partners, a healthcare-oriented group that invests in early-stage companies. He spends the other half of his time serving as chairman of the board of TechnoServe, a nonprofit organization that provides training, technical support and guidance to entrepreneurs in struggling economies. Another half of his time is devoted to his passions: family, friends, bicycling, soccer and reading the classics.

“So, that adds up to one and a half,” Tierney says with a laugh.

We’re sitting in Tierney’s living room on the Upper East Side of Manhattan, a room that, like Tierney himself, is warm and elegant. The walls and furniture are muted pastels and creams; the choral music coming from the speakers is hushed; and the city outside is quieted by Central Park across the street and the falling snow.

This juggling of all his time, plus half, is done with equal elegance. Tierney, 68, has amassed a fortune in his career as an investor, enough to invest in Washington D.C.’s Major League Soccer team and to travel the world to read classics in the cities where they were written. And even as he climbed his way to the top, he carved out time to help others.

“I’m fortunate that I can go back and forth between these different worlds. I don’t feel it’s a big tug,” he says. “The mix of things constitutes a satisfying life for me.”

In his mind, balancing a desire to do well and a desire to do good isn’t all that complicated. “In order to be successful, it’s my theory that you have to be able to focus,” he says. “Just as a baseball player has to be able to bat well or pitch well, he’s not also trying to be fair to the opposition or to improve the environment or to do anything on a lot of social issues. But he doesn’t play baseball all day long. After the game’s over, after his job is finished, he does other things.”

Tierney credits his wife, Susan, and his parents for instilling and fueling his commitment to public service. He grew up in La Grange Park, a suburb of Chicago, and went to Fenwick High School, a Catholic school in the Dominican tradition, in Oak Park. Tierney says his parents placed a high value on education and service, devoting extra time to church and PTA activities. Oak Park is where Tierney met Susan as well. He was a new kid in town when Susan’s mother, in an altruistic moment of her own, invited Tierney to her twin daughers’ 16th birthday party.

He also credits the education he got at Notre Dame and, in particular, the advice of his friend, Father Ted Hesburgh, CSC. Tierney recalls his confusion as a young man, approaching college graduation with a major in philosophy and debating whether to pursue a doctorate in political science or philosophy, apply for business school at Harvard, or go to law school.

Hesburgh was president of Notre Dame at the time, and Tierney had come to know him through his involvement with campus politics. “I remember one evening when I was a senior,” says Tierney. “I was living in Walsh Hall, where you could see [Father Hesburgh’s] room, and I could see that the light was on in his room. He was notorious for staying up late at night.” Tierney called Father Hesburgh and was invited to come over and talk. “He gave me the obvious advice that I didn’t know what I was doing, and a good thing to do would be to join the Peace Corps and grow up. So that’s what I did,” Tierney says.

He spent the next two years in Chile with the Peace Corps, where he initiated a program to help small farmers become more commercially successful. While he was there, Hesburgh came to visit. So did his friend from high school, Susan, the girl he’d met at the 16th birthday party. She spent part of that time in Chile as well, working as a teacher as a Holy Cross school. It was in Chile that Tierney proposed and the two got engaged.

Tierney came back from his time in the Peace Corps with a motivation to help those who are struggling, but his drive was mixed with skepticism. “I was critical of the international and American aid missions at the time, because I thought they were very wasteful and built dependency, rather than independence,” Tierney says. He’d seen “a lot of good people, a lot of well-educated and smart people, but collectively not doing very well.”

Back in the United States, Tierney pursued the advanced degree he’d been considering before graduation, becoming a Baker Scholar at the Harvard Business School. He did some volunteer work while at Harvard and started a company called Development Entrepreneurs, which aimed to bring venture capital to what he calls frontier markets. The firm backed entrepreneurs in inner-city areas of the United States, the Dominican Republic and a few other places.

His knack for venture capital, in and out of frontier markets, carried him through the next several years: he managed funds, his own firm and the investments of some large corporations. He also settled in Connecticut, and had three children with Susan — besides Matthew, he has a daughter, Patricia, and another son, Michael. During these years, Tierney also took time out of his work schedule to coach soccer, play soccer and travel. When asked if he has an exceptional ability to pick markets or businesses in which to invest, Tierney smiles and says, “I hope so. I’m going to lose a lot of money if I don’t.”

Tierney became known during these years as something of a corporate raider and a proponent of strategic-block investing, a practice in which investors purchase enough shares — a strategic block — to have an active voice in company affairs and instigate changes. The funds never plan to take ownership, only change control. Tierney’s fund, Coniston Partners, broke up struggling travel conglomerate Allegis Corp. in 1987 after buying a stake. The New York Times described it as a “genteel takeover” that same year, and a Fortune Magazine profile of Coniston depicted the three investors, Tierney, Keith Gollust and Augustus Oliver, as calm and cerebral, saying they “do the brain work themselves, sometimes while cycling through Central Park; they pay other lawyers and investment bankers to attend to the pedestrian details.” That same article says each man personally earned $50 million in May and June of that year.

By the mid-1980s, the drive to help others took hold, and Tierney was introduced to TechnoServe through his friend and fellow Notre Dame graduate, John Caron ’45. Caron had been a longtime supporter of TechnoServe, which was founded by Ed Bullard. In the 1960s, Bullard, like Tierney, had volunteered overseas, working at a hospital in Ghana. He came back wanting to help developing countries, but without building dependency. So he launched a nonprofit to provide technical assistance to the rural poor. Thus the name TechnoServe: technology in the service of mankind.

Tierney started as a member. In this role, Tierney says, he visited projects in El Salvador, Peru and Ghana, “to understand what the work on the ground was really like, and to help out with business advice and strategic planning.” He’s been chairman for the past 20 years. This means Tierney works closely with TechnoServe’s chief executive officer, Bruce McNamer, a former investment banker and management consultant from McKinsey & Company, on the overall governance of the organization, and he often visits countries with programs.

TechnoServe has a team of about 900 people working in 31 countries. This includes industry experts who volunteer their time and talent to host-country nationals. Each country has a director, who, Tierney says, tends to be an entrepreneurial person. Working alongside the country directors are product specialists. “We have a guy who probably knows more about cashew processing than anybody in the world,” he says. TechnoServe also has a lively presence on the Internet. Its website is updated often and the Facebook page has a genuine communal feeling, with posts and “likes” from around the world.

The organization’s commitment to building solid business structures and then tracking progress is different from the practice of institutions that offer microloans. “Only in rare instances do we arrange financing,” says Tierney, who takes off his venture-capital hat when working with TechnoServe. “Microfinance is more an urban phenomenon than a rural phenomenon. And, we’re primarily working in rural sectors.” Another issue is the culture: Attitudes toward capital and paying back loans are different in some of these areas than they are in America.

Tierney travels a couple of times a year to Africa, once a year to India, and a couple of times a year to Latin America, “to be sure that I have my fingers on the pulse,” he says. Often he travels with McNamer, who attests to Tierney’s business acumen and altruism. “Paul likes people. He likes give-and-take. And he is keenly interested in the work we’re doing,” McNamer writes in an email message from Davos, Switzerland, where he attended the World Economic Forum. “He has figured out some things about life and success that few other people seem to balance so well.”

As TechnoServe’s chairman, Tierney meets with host-country public figures, ministers or presidents, and international donors. Groups such as the Bill & Melinda Gates Foundation, the Clinton Bush Haiti Fund and the International Finance Corporation back TechnoServe projects. U2 lead singer Bono praised TechnoServe’s work in fighting poverty in Africa.

TechnoServe’s real impact is in making information and technology available, he says. One broad area of business is what TechnoServe calls its value-chain work. Consultants help small growers in a supply chain produce a better and more dependable product. In Haiti, for example, in an effort to help sustain a long-term recovery, TechnoServe and the Coca-Cola Company launched the Haiti Hope Project in early 2010. Coca-Cola’s Odwalla subsidiary makes a Haiti Hope Mango Lime-Aid, with mangoes supplied by thousands of Haitian farmers. TechnoServe’s advisers and volunteers work with the farmers to improve growing conditions, so they can produce more mangoes of uniform quality. They also help arrange a delivery system for the mangoes, lining up trucks and a workable schedule. TechnoServe provides access to pricing knowledge, bookkeeping, banking and production techniques.

“It’s not the same thing as sending a man to the moon or curing cancer, but it’s important technology in these primitive economies,” Tierney says.

Among other recent projects he is particularly proud of is TechnoServe’s Coffee Initiative. It’s funded by the Gates Foundation and has been implemented in Rwanda, Ethiopia, Kenya and Tanzania. The goal is to upgrade the value of the coffee, so that it’s a branded, specialty coffee of the sort available at high-end coffee shops, thus bringing the growers more income. While these countries all grow good coffee, Tierney says, “Our work has been to make the coffee more uniform and getting buyers to come.” Local farmers are taught better planting and harvesting methods, while local coffee processors are changing the way they wash, dry and roast the beans. Now, says Tierney, “you can go into a Peet’s Coffee shop and see coffee from our growers.”

David Browning, senior vice president of the Coffee Initiative, has worked closely with Tierney. Like many of TechnoServe’s leaders and members, he left a prestigious corporate job because he wanted to lend a hand in the fight against world poverty. In their dealings in Africa, Browning says, Tierney has a great balance of urgency and patience. “Paul is very committed to whatever he turns his attention to.” He says Tierney shows tremendous curiosity and interest when meeting with young entrepreneurs, and he’s always prepared to devote time to figuring out how TechnoServe can help. “He’s a remarkable example of what Notre Dame inspires in its graduates,” Browning says.

Tierney says having majored in philosophy has helped him focus on the larger picture. This likely helps him to juggle the many passions in his life — including philosophy and literature.

For a time, from 1990 to 2004, the Tierneys had a home in Santa Fe, New Mexico, where Susan pursued her interests in art and Native American culture. While Tierney stayed busy as always, even played soccer, hiked and rode his bike, he started looking for a more intellectual activity. St. John’s College was close to their house, so Tierney took a few seminars, got to know some of the tutors and the president of the college and, finally, was asked to be on the board. “The summer courses were always good, because the books were always good. I mean, they’re classics for a reason,” he says.

The students, however, were not always as engaged as he was. So, he gathered about a dozen friends to form a classics reading group. The first seminar, 10 years ago, dealt with existential philosophy. Since then, the group has grown to about 100 friends and friends of friends. And they’ve moved on from the St. John’s campus to travel the world. Last year’s seminar was in Athens, where the group read and studied the life of Alcibiades, a politician and military leader. The year before, they read British poets at the Notre Dame facility in London, and studied with ND Professor Greg Kucich. This year, they’ll head to Prague and read Kafka.

The planning doesn’t just involve choosing a writer to study and lining up a tutor. Each year, about 50 of the 100 people in the group attend. They break up into two rooms of 15 or 20 students during the day, and the spouses who don’t do the readings go sightseeing or do their own thing. In the afternoon, there are lectures or tours and dinner in the evenings. So planning takes a good deal of time. “I have one dedicated person who works for me as the administrator of the seminars,” Tierney says. “The work of selecting the literature, the venues, the themes — that is a labor of love and involves countless, satisfying hours.”

But it’s worth it, Tierney says. “So often, friends get together and conversation is about how many angels you can put on the head of a pin, or how was your last golf game, or what’s the best way to get to LaGuardia airport. And, instead, here we have an excuse to talk about some very good things.”

Seeing and talking about these very good things is Tierney’s gift. He acknowledges how fortunate he is to have the time and money to pursue his interests — interests that include fighting poverty. But doing good while doing well doesn’t require power, success or wealth. “I think most people have jobs that they have to perform. And in the performance of that task, you do do good,” he says. “It’s not the same as being in a political or a not-for-profit organization, where your intention is to produce some societal good, but I think that indirectly you do produce it.”

Tierney takes another look at the time. “I needed to leave like five minutes ago,” he says. He’s headed to a meeting where he won’t be the leader; Susan will. “I love it.”

Lori Barrett is a freelance writer and editor living in Chicago. Her work has appeared in The Wall Street Journal, Time Out Chicago, Venus Zine and the book Mamas and Papas: On the Sublime and Heartbreaking Art of Parenting.